New York — The New York Independent System Operator will work with federal and state regulators on buyer-side mitigation rules, energy storage rules, transmission development and its Comprehensive Reliability Plan in 2021 as the state pushes ahead with energy transition initiatives, NYISO President and CEO Rich Dewey recently told S&P Global Platts.
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NYISO has been working with the Federal Energy Regulatory Commission on capacity market improvements and what is known as Buyer-Side Mitigation, which are rules to prevent buyers and sellers from taking actions that harm competition, according to the grid operator.
"We've taken the stance that New York's mitigation rules aren't perfect, but they do allow for strategic entry of some renewable resources and have worked pretty well to keep the supply/demand balance in the markets," Dewey said in a phone interview.
Dewey remains optimistic NYISO can make the buyer-side rules work in New York noting that some of their renewable energy exemptions and BSM rules were approved by FERC earlier in 2020 and the rules can be "fine-tuned" and provide a "little leeway" for state-sponsored resources, he said. The deadline for those rules changes is Dec. 21.
And NYISO's energy storage rules went live a few months ago so energy storage now can participate in the wholesale energy, ancillary service and capacity markets, Dewey said.
The grid operator is also working on rules for hybrid storage resources like solar coupled with a battery which should be completed in 2021.
"So, 2020 was the year of storage, 2021 will be hybrid resources and ... in 2022 we anticipate having our set of distributed energy resource rules in place," Dewey said.
NYISO is also already mostly in compliance with FERC's recent Order 2222 (RM18-9) that enabled distributed energy resource DER aggregators to compete in all regional organized wholesale electric markets.
"We think that we're pretty well compliance with it [Order 2222] already. The set of DER rules that we filed ... we think are pretty compliant with the 2222 Order," Dewey said. There may be some "finetuning" to do on the ancillary service area, he added, but the set of rules already accepted by FERC appear to be pretty well in compliance that there may not be much more work to do on that item.
The 2222 compliance filing deadline is July 19, 2021.
As part of NYISO's two-year Reliability Needs Assessment, the grid operator will complete a Comprehensive Reliability Plan in 2021.
"This Reliability Needs Assessment is pretty notable because this is the first instance where we've identified some needs mostly as a result" of the New York State Department of Environmental Conservation's peaker plant rule, Dewey said.
The DEC recently put some new greenhouse gas emissions standards in place for power generation plants in an around New York City that help serve peak power demand during the summer, with many of them running on natural gas or oil.
Starting in 2023 and then more prominently in 2025, the RNA assessment identified some needs in New York City, Dewey said. So, in 2021 NYISO will do a Comprehensive Reliability Plan, which is designed to be the solution to the needs identified in the earlier analysis, he said.
The comprehensive plan will be done this summer in conjunction with transmission owners to find market-based solutions and a plan to reliably let those peaking units retire.
"The solutions range from transmission upgrades to potentially new supply or storage and if we can't identify enough resources to solve all the needs there is a safety valve in the DEC rules" for the peakers to get an extension to provide enough time for adequate solutions to be built, Dewey said.
New York has also demonstrated progress on FERC Order 1000 transmission projects, with that order designed to improve transmission planning and cost allocation methods.
New York's Western Transmission project is set to start construction in early 2021 and the AC Transmission project that will help move power into Southeastern New York is going through siting right now and will be "close on the heels" of the Western Project, Dewey said.
Studies have demonstrated that more transmission will be needed for New York to meet its goals of 70% renewable electricity by 2030 and emissions-free power by 2040, he said, adding the new generation pockets of onshore wind could be constrained without transmission expansion.
"The good news is New York State has indicated they agree with that" and have fast-tracked siting rules for new projects, some of which are being moved forward by the New York Power Authority, Dewey said. "So, we are looking forward to more progress on that next year as well."